Question

Ron invested $700 for 9 years at 3.4% compounded semi-annually. How many compounding periods are there over the term of the investment?

Answer 1

Answer:

financial equations use the formula

$A=P (1 + \frac{r}n)} ^{nt}$

where

A is accrued amount

P = principal

r= interest rate

t = number of periods (NOTE: NOT NUMBER OF YEARS !!!)

r = interest rate (NOTE: APR the whole years interest NOT the period)

So in your question the compounding is being done "Semi-annually:

NOTE:

Annual = 1

semi-annual = 2

Quarterly = 4

monthly = 12

So your number of periods is ..... number of years (9) times the number of periods in a year (2 - for semi-annual)

9 * 2 = 18 there are 18 periods

$A=P (1 + \frac{.034}2)} ^{18}$

Step-by-step explanation: